BRRRR has central heat but no A/C. Should I install?

6 Replies

I am in the rehab process with my first investment property. The house is older (1917) but has what looks to be a fairly new central heating unit with full ducting. Since this is my first property and I am chosing the BRRRR method, I initially wanted to put as little into the house as possible to keep cash in my pocket for anything that may go wrong. Although the house is now 75% finished and I am thankfully well under budget. Since the house already has ducting and central heat, I began wondering just how expensive it would be to add A/C and how beneficial it would be for the refinance.

The house is 3 bed, 1 bath. Almost 1200 sqft single story. If the cost to install can be made up for, and then maybe a little on top when we refinance I may jump into it. I know I will need to call around and get quotes based on my house/area, but I was wondering if anyone could offer any input on how much adding central air may sway the refinance? Should it be worth the investment, would I be lucky to break even or should I settle for 3 or 4 window units?

I am planning to hold the house and rent it, no intentions to sell at this time. Any input is greatly appreciated!

Most houses here do not have central air; however, I have to wonder if this is "expected" in NC...what class property is this?  I'd consider other properties around for rent...do they have CA...a) if they do that is what you will be competing against b) if CA is not the norm for your area this may enable you to get a few more dollars in rent  c) Also, if CA is the norm not having it may cause a lot of churn in tenants

I'm not really sure if CA will account for itself via appraisal but you should consider if it can help reduce churn + window units will for sure cost you or the tenant more electricity again causing churn.

b

Hey, thanks for the reply. I would say this is probably an upper c class or lower b class property. Central air is definitely the norm in my area. When i was researching the house before I purchased it, I was very surprised to see it had no A/C.

@Josh Clinard the real question is does your rental competition have AC. Will not having AC make you drop your rental price? Or would having AC allow you to add an extra $100/mo to your rental cost?

Adding central air to an existing forced air system should be in the $1500-2000 range. At $100 extra per month, that's paid off in 1-2 years. Well worthwhile!

But again, in a C neighborhood, you might not be able to get that much more. It really depends on your comps.

Good point. The town I am investing in is pretty small, but very desirable and nice compared to the larger surrounding cities. Almost all of my competition will have A/C, although not many places in my area are for rent. Most homes in the area are for sale only and very few ever come up for rent. The potential to raise rents based on adding A/C is a positive though.

@Josh Clinard If central AC is the norm I would definitely install it no question. In a C area you do not want anything holding you back from landing a top level C+/B- tenant. There is a big difference between a solid C tenant and a low C tenant in my experience.

I would get quotes. If it truly can be done or $1200-2000 I would jump all over it (especially being under budget as you stated). If it costs higher I would start to really lay the numbers out and see how much more you can rent for, and what the return is on the added cost.